One of the first questions I am often asked when somebody is considering an office project is, “What should I allow per square foot?”
It is a perfectly reasonable question, and £/sq ft benchmarking is a useful way of getting an initial sense of likely expenditure. We use benchmarking extensively ourselves.
The problem comes when the benchmark becomes the budget.
If somebody tells you that an office fit-out should cost £150/sq ft, the obvious next question should be: £150/sq ft for what exactly?
A 50,000 sq ft workplace for a professional services business can have a completely different cost profile from a 50,000 sq ft technology office. Even two offices occupied by the same organisation can cost significantly different amounts depending on the building, location, workplace brief and existing infrastructure.
The rate is the output. Understanding what sits behind it is far more important.
Why £/sq ft Benchmarking Is Useful
There is a reason the property and construction industries use £/sq ft benchmarks. They allow us to normalise projects of different sizes and provide a relatively simple way of comparing costs.
At the earliest stages of a project, when there may be little more than an area schedule and an outline brief, this can be extremely useful. A relevant benchmark can help establish whether an initial business case is broadly realistic and provide a starting point for further investigation.
It is also a useful sense check throughout the design process. If a cost plan is materially above or below comparable projects, we should understand why.
The important word, however, is comparable.
A benchmark is only useful if you understand what you are comparing.
What Is Included in the Benchmark?
This is probably the first question I would ask.
When somebody says their last office cost £180/sq ft, does that include furniture? AV? IT? Professional fees? Contingency? Inflation? Landlord works? Client direct costs?
Is the rate based on the contract sum, the final account or the total project budget?
Even the construction cost itself may have been measured differently. One consultant’s definition of fit-out cost may not be identical to another’s.
Before using any benchmark, the basis needs to be normalised so that you are comparing like with like. Otherwise, a rate that appears cheaper may simply contain fewer things.
The Building Matters
The same workplace design can cost materially different amounts in two different buildings.
One building may have sufficient electrical and cooling capacity, suitable toilets, compliant fire systems and a good-quality raised floor and ceiling that can be retained. Another may require upgrades to all of them.
Floorplate geometry matters as well. A large, efficient floorplate may require fewer tea points, communications rooms and support spaces than the same area distributed across several smaller floors.
Then there are building-specific items such as interconnecting staircases, structural alterations, additional risers, landlord interfaces and restrictions on working hours.
These aren’t necessarily reasons not to take a building, but they make a generic £/sq ft benchmark increasingly unreliable.
This is why the pre-lease due diligence we discussed in last week’s newsletter is so important. The better you understand the asset, the more meaningful the cost advice becomes.
Workplace Density Changes the Cost
Area alone tells us very little about how intensively the space will be used.
Imagine two 50,000 sq ft offices. One accommodates 300 people and the other accommodates 600.
The second workplace may require more desks, lockers, meeting spaces, AV equipment, power, data, cooling and welfare provision. The building services may also need upgrading to accommodate the increased occupational density.
Both projects have exactly the same floor area, but their functional requirements are very different.
This is one reason I prefer to look beyond £/sq ft and understand measures such as cost per workstation, meeting-room provision, occupational density and the functional cost of key areas.
The objective isn’t to create more metrics for the sake of it. It is to understand what is actually driving the investment.
Specification Makes a Significant Difference
The phrase “high-quality office fit-out” is almost meaningless from a cost planning perspective.
What does high quality mean?
Natural stone can cost considerably more than porcelain. Bespoke joinery will have a different cost profile from standard products. Feature lighting, specialist acoustics, high-end AV, catering facilities and furniture standards can all materially affect the budget.
Sustainability aspirations can also change the initial capital requirement, although they may produce benefits through operational savings, carbon reduction or improved workplace performance over the life of the asset.
A useful benchmark therefore needs to reflect the level of specification the client actually intends to deliver.
Location and Market Conditions Matter
A benchmark also needs to be adjusted for where and when the project was delivered.
A project tendered three years ago cannot simply be compared directly with one going to market today. Labour costs, materials, contractor appetite and supply-chain conditions change over time.
The same applies geographically. A London benchmark cannot automatically be applied to Paris, Munich or Warsaw without understanding local market conditions, procurement practices, labour costs, taxation and specification expectations.
For global occupiers, this becomes particularly important. Consistency of workplace standards does not mean consistency of cost.
Historic project data needs to be indexed to an appropriate date and location before it becomes useful evidence for a new investment decision.
Programme and Procurement Can Change the Price
How the project is delivered also affects what it costs.
A compressed programme may require early procurement, extended working hours, additional resources or premiums for securing supply-chain capacity. A two-stage procurement route will expose the client to a different commercial position from a fully designed single-stage tender.
Likewise, a project procured during a period when contractors have full order books may attract very different pricing from one tendered into a quieter market.
A benchmark without procurement and programme context therefore only tells part of the story.
So What Does Good Benchmarking Look Like?
Good benchmarking starts by selecting genuinely comparable projects and then understanding the differences between them.
I would want to know the location, tender date, floor area, occupational density, specification, procurement route, programme and base-build condition. I would also want to understand what is included within the reported cost and whether the figure represents a tender return, contract sum or final account.
From there, the benchmark can be adjusted for inflation, location and known differences in scope before being used to inform the new project.
The result may still be expressed as £/sq ft, but there is now evidence sitting behind the number.
That is a very different proposition from simply saying, “Our last office cost £200/sq ft, so let’s use that.”
What Should Clients Ask Their Cost Consultant?
If a benchmark is being used to establish or validate your office budget, I would ask your Cost Consultant to explain where the data came from and why the projects are genuinely comparable.
Ask what is included and excluded from the rate, whether the historic data has been adjusted for inflation and location, and how differences in specification, occupational density and building condition have been treated.
I would also ask what the benchmark looks like using another measure. What is the cost per workstation? What are the costs of the major functional areas? How does the MEP allowance compare? Which elements of the proposed project are materially different from the benchmark projects?
Most importantly, ask what your cost consultant thinks could make the benchmark wrong.
That question gets you away from the apparent precision of a single number and into the assumptions and risks that actually determine the project outcome.
Final Thought
There is nothing wrong with £/sq ft benchmarking. Used properly, it is an extremely valuable cost-planning tool.
The danger comes from giving the rate more certainty than the information behind it deserves.
A benchmark should start a conversation about cost, not end it. As the workplace brief, test fit and technical information develop, a generic allowance should progressively become a project-specific cost plan based on what you are actually going to build.
If I were approving a significant workplace investment, I wouldn’t just want to know the £/sq ft.
I would want to know why it is the right £/sq ft for my project.
How EthosEQ Can Help
At EthosEQ, we use benchmarking to help clients establish and test workplace budgets from the earliest stages of a project. Rather than relying on a single headline rate, we look at the factors that actually drive cost, including workplace density, specification, building condition, MEP requirements, programme, procurement strategy and market conditions.
For clients managing portfolios across multiple locations, this also allows historic project information to become more useful. By normalising the data and understanding why projects differ, previous investment can provide a much stronger evidence base for future capital planning.
As the design develops, we progressively replace benchmark allowances with project-specific information, measured quantities and market testing. The objective is to give clients increasing confidence in the budget as they move towards committing expenditure.
Links
Cost analysis and benchmarking 2nd edition
Office Lease Fit-Out Costs: What to Know Before Signing
Copyright
© 2026 EthosEQ Limited. All rights reserved.
This publication is the intellectual property of EthosEQ Limited. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means without prior written permission, except for brief quotations used for review, commentary or non-commercial educational purposes, provided EthosEQ is acknowledged as the source.
Disclaimer
This article has been prepared by EthosEQ Construction Advisors Limited for general information purposes only. It reflects the author’s professional opinion and experience at the time of publication and is intended to promote good practice in cost management and project delivery.
The content does not constitute legal, contractual, financial or professional advice and should not be relied upon as the sole basis for making project or investment decisions. Construction costs and benchmarking data can vary materially depending on project scope, specification, location, programme, procurement strategy, market conditions and other project-specific factors. Every project should therefore be assessed on its own merits.
Whilst reasonable skill, care and diligence has been exercised in preparing this publication, EthosEQ Construction Advisors Limited accepts no responsibility or liability for any loss or damage arising from reliance on the information contained within it. Clients should seek project-specific advice from appropriately qualified professional advisers before making commercial, contractual or investment decisions.
